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Economic Forecast Projects 1.4 Percent State Income Growth in 2002

In its latest Iowa Economic Forecast, the University of Iowa Institute for Economic Research expects real income growth of 1.4 percent in 2002, down slightly from a forecast of 1.6 percent in February.

Beth Ingram, Institute director and UI professor of economics, said the forecast is based on state income data through the first quarter of 2002. Real income growth for 2003 is expected to be 2.9 percent in 2003, up from 2.7 percent forecasted in July.

Robust revenue growth in July has lead to an upward revision in the Institute's forecast for revenue growth for the current fiscal year, FY03. The Institute is forecasting a growth rate of 3.5 percent for state tax revenue in the current year, followed by zero revenue growth in fiscal years 2004 and 2005.

The Institute's forecast also anticipates flat employment growth in Iowa in 2002. Following on the heels of an employment decline of 0.8 percent in 2001, the Institute expects employment to decline by 0.2 percent in 2002 before rising by 1.7 percent in 2003. The July forecast predicted employment to decline by 0.5 percent in 2002 before rising by 1.4 percent in 2003.

The Institute released its report today (Friday, Sept. 20) at the Iowa Economic Forecasting Council meeting in Des Moines.


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